Engineering Leadership in 2025: AI, Burnout, and the Motivation Crisis

What 617 leaders said about the real state of engineering teams this year

Jun 24, 2025

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60% of engineering leaders say AI hasn’t significantly boosted team productivity.
That’s not the headline we expected in 2025. But it’s the reality shared by 617 engineering leaders surveyed by LeadDev in their latest Engineering Leadership Report.

The report has a ton of insights and also a mirror reflecting the tensions, pressures, and paradoxes engineering leaders are living through right now.

Some quick stats that stood out:

65% are worried about a recession.
53% believe there are fewer jobs available (up from 48% in 2024).
40% say their teams are less motivated than they were 12 months ago.

In this post, I share the most important insights and what they mean for engineering leaders.

How companies are changing

Layoffs are slowing down but hybrid work is declining

The chaos of 2024 is tapering off:

Hiring freezes dropped from 50% → 35%
Layoffs fell from 44% → 34%

Encouraging signs. But one surprising trend: 25% of companies now require more time in the office. Hybrid flexibility is being walked back, especially in larger orgs.

Watch for: Increased attrition risk when hybrid perks are removed without clear upside.

Line managers are caught in the crossfire

28% of companies cut manager roles, mainly impacting Engineering Managers and Tech Leads.
But 22% added new management roles, mostly again at the line level.

So while some teams are flattening, others are re-investing in leadership. Line managers are either the first to go, or the first to be hired/promoted. That volatility speaks volumes about how uncertain org strategies really are.

AI is being adopted... with hesitation

51% of leaders say AI is impacting the industry negatively (up from 42% in 2024)
60% say AI hasn’t meaningfully improved team productivity

Despite the hype, many teams aren’t seeing real gains. In some cases, AI tools are adding friction or creating code maintainability issues. Especially for junior engineers, AI often masks bad patterns and slows down learning.

Engineering Managers need to guide AI adoption, not just adopt tools reactively.

The #1 hiring problem: finding good candidates fast

It’s ironic: job seekers are everywhere, yet 79% of leaders say finding good candidates quickly is the hardest part of hiring.

Part of the problem:
→ Expectations are rising while budgets are shrinking.
→ Junior roles are being replaced by AI or simply cut.
→ Interview loops are more complex, and trust is harder to build.

Being an Engineering Manager in 2025

More teams, more scope, more direct reports

65% of engineering leaders now cover wider responsibilities
40% took on more direct reports

The flattening trend is real and it’s pushing EMs toward broader ownership with fewer peers to share the load.

38% are working longer hours

Expanded scope is showing up in work hours. And it’s not always efficient work. Many EMs are buried in incident reviews, reorganizations, and stakeholder management.

Communication has become the #1 skill

58% of leaders are spending more time communicating. That includes updates, change management, executive briefings, and translating strategy into execution.

This confirms what many of us feel: Great communication isn’t a nice-to-have - it’s your most leveraged tool as an EM.

Burnout is rising - 22% are critically burned out

Only 21% of respondents described themselves as “healthy.”
The rest fall somewhere between moderate and high burnout.

12% say they feel emotionally drained every day.
That’s a signal we can’t afford to ignore.

Team motivation is down

38% of leaders say their teams are less motivated than last year. Only 14% said motivation has improved.

Why?

Constant reorgs
Fear around AI replacing people
Lack of clarity on career progression
Loss of meaning in the work

The impact of AI on Engineering Leadership

AI features are the most-shipped projects

Over 50% of companies shipped an AI-powered feature last year.

But many are shipping without clear product-market fit. AI has become the new checkbox feature. The danger: we're solving for buzzwords, not problems.